Venture-Backed Media Firm Shuts Down.

Like so many now-failed technology companies, The Zone News started out with high hopes. The L.A.-based monthly magazine was going to serve as a voice for the often-ignored local tech community.

"What we really need is a gap-filler, a central location, an information base, where people -- both locally and nationwide - can read about everything that's going on down here' wrote then-Editor Elizabeth Biley Andrion in the premiere November/December 1999 issue.

That was then. The last issue of The Zone News came out in June. The magazine, published by Zone Communications, halted its daily e-mail newsletter this month and the 15 remaining employees were laid off, said David Cremin, a partner at Zone Ventures, one of the area's most well-known venture capital firms and owner of Zone Communications.

Cremin said that the shutdown would be only temporary.

"We are trying to work out how to reinvigorate the publication and other than that, I'm not going to comment any more," he said. "When you're in a position where you're trying to revitalize a company, you can't talk about it too much."

Cremin attributed The Zone News' problems to the advertising slump that has hurt so many other publications this year. Tech magazines have been hit especially hard, leading to the closure of Industry Standard, the sale of Business 2.0 and significant cuts at Red Herring.

"They're another one in a long line of this news," said Jon Goodman, executive director of EC2, a business incubator at USC's Annenberg Center for Communication "if anything, they have to be complimented for lasting a little longer."

Former employees say that the problems plaguing The Zone News went beyond the dot-com bust.

Former Zone News Editor Ben Sullivan, who resigned in March, said the economic slowdown had led many of the magazine's national advertisers to cut their spending when "the publisher decided to take a new look at how we should approach things editorially?' He did not elaborate on the changes made, but said that under his watch the editorial content had been "really examining issues and not Pollyannaish."

Zone News was having a hard time generating ad revenues, a key source of income for the free publication, but Cremin argued that the magazine met its goals. "In a difficult market, the magazine ran for over two years," he said.

But Matt Welch, a freelance writer who regularly contributed to the magazine, painted a gloomier picture of Zone Communications' economic situation.

"It was messy in the end," he said. "They were having trouble meeting payroll and getting checks out. I think they eventually got checks to everyone they owed (money) to."